The programmed death-1 (PD-1) costimulatory pathway has been demonstrated to play a role in the regulation of immune responses and peripheral tolerance. We investigated the role of this pathway in establishing an immune privilege status of corneal allografts in mice. B7-H1, but not B7-DC or PD-1, was expressed constitutively in the eye, ie, cornea, iris-ciliary body, and retina. After corneal allografting, PD-1+ CD4+ T cells infiltrated and adhered with B7-H1+ corneal endothelium. Blockade of PD-1 or B7-H1, but not B7-DC, led to accelerated corneal allograft rejection. In B7-H1-expressing corneal allografts, apoptosis of the infiltrating PD-1+ CD4+ or CD8+ T cells was observed, after which there was allograft acceptance. In contrast, B7-H1 blockade suppressed apoptosis of infiltrating PD-1+ T cells, which led to allograft rejection. In vitro, destruction of corneal endothelial cells by alloreactive T cells was enhanced when the cornea was pretreated with anti-B7-H1 Ab. This is the first demonstration that the constitutive expression of B7-H1 plays a critical role in corneal allograft survival. B7-H1 expressed on corneal endothelial cells maintains long-term acceptance of the corneal allografts by inducing apoptosis of effector T cells within the cornea.